Correlation Between Expro Group and Forum Energy
Can any of the company-specific risk be diversified away by investing in both Expro Group and Forum Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Expro Group and Forum Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expro Group Holdings and Forum Energy Technologies, you can compare the effects of market volatilities on Expro Group and Forum Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Expro Group with a short position of Forum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expro Group and Forum Energy.
Diversification Opportunities for Expro Group and Forum Energy
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Expro and Forum is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and Forum Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Energy Technologies and Expro Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Expro Group Holdings are associated (or correlated) with Forum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Energy Technologies has no effect on the direction of Expro Group i.e., Expro Group and Forum Energy go up and down completely randomly.
Pair Corralation between Expro Group and Forum Energy
Given the investment horizon of 90 days Expro Group Holdings is expected to generate 1.04 times more return on investment than Forum Energy. However, Expro Group is 1.04 times more volatile than Forum Energy Technologies. It trades about -0.01 of its potential returns per unit of risk. Forum Energy Technologies is currently generating about -0.04 per unit of risk. If you would invest 1,845 in Expro Group Holdings on September 1, 2024 and sell it today you would lose (456.00) from holding Expro Group Holdings or give up 24.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expro Group Holdings vs. Forum Energy Technologies
Performance |
| Timeline |
| Expro Group Holdings |
| Forum Energy Technologies |
Expro Group and Forum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expro Group and Forum Energy
The main advantage of trading using opposite Expro Group and Forum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expro Group position performs unexpectedly, Forum Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Forum Energy will offset losses from the drop in Forum Energy's long position.| Expro Group vs. ChampionX | Expro Group vs. Ranger Energy Services | Expro Group vs. Cactus Inc | Expro Group vs. MRC Global |
| Forum Energy vs. Enerflex | Forum Energy vs. Now Inc | Forum Energy vs. Newpark Resources | Forum Energy vs. Bristow Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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